The board of directors of Haldex Aktiebolag, the Sweden-based brake system manufacturer, announced on August 4 it has unanimously decided to recommend that Haldex shareholders accept a 4.4-billion SEK ($516 million) cash bid by Germany-based ZF.

The Haldex board also stated it had rejected an earlier offer made by Germany’s SAF-Holland. That bid reportedly was for $495 million, or 5.9% less than what ZF has offered.

Should the deal be approved by Haldex shareholders and gain regulatory approvals, the global vehicle component manufacturer will pay 100 SEK a share in cash. According to ZF, that would amount to 34% more than the Swedish company’s average share price prior to the offer made by SAF-Holland in mid-July.

“The Board has unanimously decided to recommend the Haldex shareholders to accept the ZF Offer, which is clearly superior to the SAF-HOLLAND offer,” Haldex said in an August 4 statement.

The move by ZF comes just over a year after it completed its acquisition of U.S.-based TRW.  The company also just announced acquiring a 40% minority stake in Ibeo Automotive Systems GmbH. The Hamburg-based company is a market leader in lidar (light detection and ranging) technology.

ZF said that acquiring Haldex would enable it to include brake systems for commercial vehicles in its product mix. That will enable it “to cover the whole functional chain of commercial vehicles in line with 'See-Think-Act' (the aim of ZF’s technology is to enable vehicles to see, think, and act autonomously) and transfer fuel efficiency, autonomous driving and safety systems technologies known from passenger cars to commercial vehicles.”

“We believe that our businesses are truly complementary and that a combination will offer unique value for all stakeholders,” said ZF CEO Stefan Sommer. “We are confident that we will be able to continue to develop Haldex’s market position under ZF ownership, thanks to ZF’s technological leadership, global reach and customer access, combined with Haldex’s technological competence, management skills and employees.”

Magnus Johansson, Board member and spokesperson of the Board of Haldex, said that ZF’s capabilities will allow the company to continue its development of future braking systems and expand its current product portfolio.

“The offer provides Haldex shareholders with an opportunity to realize value from their investment immediately at both high multiples and significant premium to recently traded prices of Haldex’s shares as well as a premium to the SAF-Holland offer,” said Johansson.

Sommer said, per a Bloomberg report, that acquiring Haldex would increase ZF’s annual revenue from truck components to about 4 billion euros ($4.45 billion) from 3.5 billion euros, accounting for 15% to 20% of group sales.